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“Generation rent” refers to a demographic group aged 18-40, who are unable or choose not to purchase property and instead rent their accommodation.  Generation rent faces financial difficulties from high living costs, an expensive housing market, low growth in wages and high student loan debt. There are now more tenants than at any point since the millennium; one in five of us in England and Wales is now a member of generation rent (source).

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Several factors contribute to the rise of generation rent:

  • High Property Prices: In many urban areas, property prices have risen significantly faster than incomes, making it difficult for young people to afford a home.
  • Economic Uncertainty: Younger generations often face greater economic uncertainty, including precarious employment, student debt, and stagnant wages, which make saving for a down payment challenging.
  • Changing Priorities: Some young adults prioritise flexibility and mobility over homeownership. Renting allows them to easily relocate for work or personal reasons without the constraints of a mortgage.
  • Financial Constraints: Strict lending criteria and high deposit requirements can make it difficult for young people to secure a mortgage, especially if they have limited credit history or irregular income.
  • Cultural Shifts: Attitudes towards homeownership have shifted, with some viewing renting as a more viable or preferable long-term housing solution.
  • Investment Opportunities: Some individuals choose to invest their savings in other assets rather than tying them up in a property, particularly if they believe they can achieve better returns elsewhere.

The rise of generation rent has significant implications for housing policy, rental markets, and the broader economy. Policymakers and businesses are increasingly focused on addressing the needs of renters, including improving tenant rights, increasing the supply of affordable rental housing, and exploring alternative housing models such as co-living and shared ownership schemes.

If you are looking to move from renting to buying a property, then read our Getting onto the Property Ladder blog.

At 3mc, we have a team of expert advisers who can discuss all your mortgage requirements. If you would like to discuss your options, give the 3mc team a call on 0161 962 7800.

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*Your home may be repossessed if you do not keep up repayments on your mortgage. 3mc (UK) Ltd is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register https://register.fca.org.uk/s/ under reference 302992. Please note: The FCA do not regulate Business Buy to Let Mortgages.